The conservative underwriting standards of many senior lenders, coupled with the retreat of banks from construction financing and high borrower demand, have led to the increased use of mezzanine loans to refinance maturing loans, facilitate property development and re-development, fund ground-up construction projects, and help finance new acquisitions.

The second-lien product is now regularly considered as an alternative to traditional mezzanine and equity when structuring all leveraged deals, whether it is for a middle-market private company or a larger public company.

In addition, the interest component of the mezzanine tranche can comprise a combination of current pay interest and PIK (paid-in-kind or deferred) interest, providing additional flexibility to the issuer.

A mezzanine can have all sorts of uses - a dressing room, home office, studio, spare room, bed platform or play area in a child's room (bed platforms are also popular in high-ceiling studio apartments).

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